Petroleum min seeks Rs20,871 cr oil bonds for fuel retailers

Petroleum min seeks Rs20,871 cr oil bonds for fuel retailers

New Delhi: Petroleum ministry has sought oil bonds worth Rs20,871 crore for state-run fuel retailers to make up for the losses incurred on selling domestic LPG and kerosene below cost during the first three quarters of this fiscal.

Three fuel retailers Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) lost about Rs26,618 crore in revenues on selling petrol, diesel, domestic LPG and kerosene below cost during the first half of the current fiscal, a ministry official said.

Of this, Rs20,000 crore is revenue lost on LPG and kerosene, the remaining was on account of petrol and diesel.

“We have sought Rs20,000 crore of oil bonds to cover for under recoveries on LPG and kerosene in the first three quarters," ministry of petroleum and natural gas additional secretary S Sundareshan said.

While the Government had committed to meeting the revenue loss arising from its dictate of not increasing prices for domestic LPG and kerosene in step with the cost, non-issuance of oil bonds till now has led HPCL and BPCL report net losses in the July-September quarter.

“We are confident of getting the oil bonds (this time)," he said, adding finance ministry may seek approval for the oil bonds in the supplementary demands for grants to be presented to Parliament during the current session.

HPCL reported a net loss of 136.68 crore in the second quarter, while BPCL posted a net loss of 58.77 crore. IOC was slightly better off, registering a net profit of 4.36 crore.

“We have made our demand to Finance Ministry and it is now for them to get the approval from Parliament," he said.

The government had earlier this year decided to make good all of the revenue loss on sale of domestic LPG and kerosene through issue of oil bonds, while the same on petrol and diesel would be mostly met by upstream firms like OIL and Natural Gas Corp (ONGC).

The three firms currently lose Rs3.68 a litre on petrol, Rs2.90 per litre on diesel, Rs18.13 a litre on kerosene and Rs250.67 per domestic LPG cylinder as the government has not allowed them to revise retail prices in line with costs.

For the full fiscal, the three firms will close with a total revenue loss of Rs45,820 crore.

The government, which had last fiscal issued oil bonds worth Rs71,292 crore, has not issued any bonds to the three PSUs for revenue losses during the current fiscal.